General Electric Co. says it will pay a $50 million penalty to settle government charges that its accounting procedures violated provisions of U.S. securities laws and increased its reported earnings to mislead investors in its financial statements, federal regulators said Tuesday.
The Securities and Exchange Commission found that GE's policies for accounting for hedging commercial paper and transactions at its rail unit were intentional violations of anti-fraud provisions of securities law.
We have concluded that it is in the best interests of GE and its shareholders to resolve this matter and put it behind us on the basis announced today, GE announced in a statement. The errors at issue fell short of our standards, and we have implemented numerous remedial actions and internal control enhancements to prevent such errors from recurring.
The suit is a result of a 4-1/2 year investigation, alleging that on four separate occasions in 2002 and 2003, GE approved financial result reporting that was not in compliance with Generally Accepted Accounting Principles (GAAP).